Government warns of Brexit recession risk

Monday, May 23, 2016 - 01:37

Treasury analysis has forecast a possible year long recession for the UK if voters choose to leave the EU. As Jacob Greaves reports, it's the latest government backed report to claim a Brexit would damage Britian's economy.

▲ Hide Transcript

▶ View Transcript

For a campaign that's been chastised as project fear, this is the Treasurys bogeyman.
They say a UK exit from the EU could spark a year long recession
The message delivered by Chancellor George Osborne
He's also warned a Brexit might lower UK GDP by 3.6% after two years.
The indepth study claiming that's a 'cautious' forecast- based on a negotiatied trade deal with the EU.
(SOUNDBITE) (English) UK FINANCE MINISTER, GEORGE OSBORNE, SAYING:
"Leaving the EU creates a huge amount of uncertainty. We've had just two years to work out how to leave the EU, two years to find out how to find a new working relationship with our European neighbours. Two years to do trade deals with over fifty other non-EU countries."
The repercussions deemed far worse if trade barriers went up with the continent.
It is the latest government backed warning to allege people's pockets would be hurt by a Brexit.
(SOUNDBITE) (English) IHS GLOBAL INSIGHT, DIRECTOR OF SOVEREIGN RISK, JAN RANDOLPH, SAYING:
"We've got this idiosyncratic uncertainty, man-made if you like, on top of the usual levels of uncertainty. So it's quite natural and normal for investors of all kinds to hold back and we're seeing the UK economy already grinding to a halt. "
But the rival out campaign say its politically motivated and shouldn't be believed.
Voters have just a month to go until they must decide who to trust.
Polls remain too close to call, but betting markets see it differently.
HEAD OF POLITICAL BETTING, LADBROKES, MATTHEW SHADDICK, SAYING:
"We've seen 90 percent of all the bets we have taken over the last four weeks have been for remain and that's kind of surprising just how confident the betting market seems to be that this is going to be a remain vote.
Those bidding to keep Britian in the EU have consistently dubbed Brexit a dangerous gamble.
And those voting with their pockets seem to think that message will come out on top.

Reuters is the news and media division of Thomson Reuters. Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Learn more about Thomson Reuters products: